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Twitter Takes On Clubhouse, Substack, Patreon And OnlyFans

Mar. 04, 2021 4:59 PM ETTwitter, Inc. (TWTR) StockMETA, GOOG, GOOGL, SPOT29 Comments
Alex Pitti profile picture
Alex Pitti


  • Twitter's Analyst Day Presentation showed a great product roadmap that made me change my stance on the stock.
  • The firm is about to take on platforms that use Twitter to acquire customers.
  • This vertical integration should give it a leg up on platforms such as Substack, Clubhouse, Patreon, & OnlyFans.
  • I think Twitter has improved its executional quickness following its backend improvement.
  • Once we see progress on these new plans, I will rate it as a buy. For now, I'm in the neutral camp.

Thesis: Twitter Is About To Monetize Its Gold Mine

In a previous article, I mentioned that Twitter (TWTR) has a gold mine of valuable content. Its problem historically has been the inability to come up with new products to leverage its strong base of support. After reviewing the late February 2021 Analyst Day presentation, I believe Twitter has a strong product roadmap and the executional focus to make it possible. Therefore, I am no longer bearish on the stock.

Ashley Mayer said it best on Twitter. She tweeted, "It's like Twitter had its entire product roadmap in drafts for years and finally hit send all." Twitter mentioned in its presentation that it previously needed to get its backend ready (it rebuilt its core ad server & improved its entire technical stack) and hire the right workers to get to the current place where it can ship products quickly. Furthermore, it helps to have the platform safer and healthier before new products ship. For example, getting rid of targeted harassment can make creators feel safer to share their personal lives on the new "Fleets" feature.

The roadmap Twitter unveiled has a massive addressable market because it is simultaneously going to go after Substack, OnlyFans, Patreon, and Clubhouse. Twitter is now allowing creators to launch newsletters through Revue. Plus, it will allow users to subscribe to exclusive posts along with tipping creators for good content. Being able to directly make money from Twitter will increase the quality of content on the platform. Furthermore, I believe there will be fewer personal attacks because people will treat the platform more seriously. That's a nice incentive to combine with Twitter's increased efforts to lower harassment.

Twitter Spaces is going to be a great way for influencers to discuss the latest news publicly with greater depth

This article was written by

Alex Pitti profile picture
I'm currently looking for an analyst position. If you like my posts, please shoot me a DM on here or email me at interviewsalexpitti@gmail.com.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (29)

crrj profile picture
Will Dems and the Tech woke crowd ever protest or censor against China since they just ruled being gay is a mental disorder?
How will that impact Tech stocks? Or do US libs only reserved protests against US cancels??
brightlake profile picture
Thanks, @Alex Pitti, for a nice article on the latest from Twitter. Features like Clubhouse are natural extensions to Twitter. Success of new apps like Clubhouse will greatly benefit Twitter. It would be really bad for Twitter if they are just flashes in the pan.
Large Margin of Safety profile picture
Nice article.

What would you have to see exactly to turn bullish?
Alex Pitti profile picture
@Large Margin of Safety initial success. Some good data points on their new features like Spaces and revue that show they are catching on.
Alix Pitti Its good to hear from you thank god I never sold my shares in Twitter I just feel Twitter could do so much more in innovation on there platform. I believe the over 400 engineer's have failed when it comes to innovation and if Twitter still owns the rights to Vine why not start it up again within the Twitter platform? I think with 400 engineers one might have the brains to get it done.
Alex Pitti profile picture
@mannybon it's late because tiktok has taken over
Twitter has a big problem getting the job done just look what happened to Vine and periscope big failures on Twitters management and part time CEO Dorsey.
Alex Pitti profile picture
@mannybon Yeah. Vine could have been huge. Hopefully, this time their new ideas work out.
@Alex Pitti I doubt it. Clubhouse already ahead of the game and Twitter doesn’t have great history.
nickhoag profile picture
Good stuff as always, Alex.

Regarding Spaces vs. Clubhouse, I'm personally already so much more likely to pop into a Space than a room on Clubhouse because I'm ALREADY on Twitter. That extra friction of having to open clubhouse is just enough to make me not do it very often. I suppose this is that "goldmine" in effect (or perhaps another way to look at it is a "network moat").

I know your post is focused on the product and not valuation, but do you have a general feel for what you would consider a fair stock price with a margin of safety?
Alex Pitti profile picture
@nickhoag Hey. Nick. Thanks for reading. I've noticed Spaces is starting to roll out to Android which is a win over Clubhouse already.

Twitter is tough to value because it's tough to figure out how successful these new products will be. It's very vague, but I'd imagine if they are successful, the stock will go up. Maybe that's too simple. Let's see. the stock rallies when mDAUs beat estimates and falls when they miss.
nickhoag profile picture
@Alex Pitti Yeah, makes sense. This focus on new, monetizable functionality certainly feels like a step in the right direction (finally).

I'm tempted to consider their margin of safety the overall quality of the product / size of user base / and clear vision for new, monetizable features (vs. how "cheap" the stock price is).

In other words, if I believe the business is getting better, not worse, there's my MOS. It's a shift in thinking for a frugal, value-type mind, but yeah.
Alex Pitti profile picture
@nickhoag yeah. I'm addicted and they have millions like me
Twitter is full of group thing and regressive extremists. They themselves embody the mindsets. I don't support a company that's causing division
Alex Pitti profile picture
@Ali Bubba Twitter isn't causing division. They are improving the health of the conversation.
@Alex Pitti improving the health of the conversation by banning free speech = no meaningful resolution.
Alex Pitti profile picture
@freakybeak It's a positive adjustment for advertisers imo
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